Question: Daily Enterprises is purchasing a $14,000,000 machine. The machine will depreciated using straight-line depreciation over its 10 year life and will have no salvage value.

Daily Enterprises is purchasing a $14,000,000 machine. The machine will depreciated using straight-line depreciation over its 10 year life and will have no salvage value. The machine will generate revenues of $7,000,000 per year along with costs of $3,500,000 per year.

If Daily's marginal tax rate is 25%, what will be the cash flow in each of years one to 10 (the cash flow will be the same each year)?

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